It’s 2022, and after investing in banks, stocks, and properties, you have a substantial amount of savings left. You’re looking to invest elsewhere. Suddenly, cryptocurrency pops up in a conversation, but you’re unsure about it.
While you believe in diversifying your investments, you are not fully aware of how the cryptocurrency market works, what is the cryptocurrency value in your country, what is the cryptocurrency list of tokens, and whether it is safe to invest in these unknown waters.
Well, sit back, relax and read this article till the end to know how to safely go about investing in cryptocurrency in 2022, what are the cryptocurrency prices now, and so much more.
What Is Cryptocurrency?
Simply put, cryptocurrency is a digital asset that can’t be controlled by any government or bank. It’s often referred to as the internet’s money, and it relies on cryptography to ensure that transactions are secure and anonymous.
Cryptocurrency started with Bitcoin in 2009, but there have been many other cryptocurrencies created since then—more than 2,000 at last count. Each unique variety has its own rules for creation, ownership, and transacting.
These may sound like complicated concepts for someone new to investing. But you don’t have to be an advanced computer programmer or math whiz to get started investing in crypto. All you need is some basic knowledge of how these currencies work, along with some time commitment and patience as your portfolio grows over time!
Choose Your Favorite Token
To start your investment journey, you need to choose a token that you like. Don’t just choose the first one you see. Make sure it has good features like security, speed, and stability. If you’re not a tech-savvy person, stick with more popular cryptocurrencies such as Bitcoin or Ethereum (you can always buy them later if they become too expensive).
Also, avoid picking tokens that have lots of bugs or problems in their code. If the community doesn’t trust them anymore, they may not be worth anything soon
If You’re Choosing a Token That Isn’t Bitcoin, Ethereum, or Ripple
Make sure you’re familiar with the way it’s structured.
For example: if you’re buying an EOS-based token (or other tokens that use Delegated Proof of Stake), do you know what the governance model is? The technology? How much power each token holder has? These things can make a huge difference in how safe an investment your asset is.
Set a Budget and Stick To It
The amount of money you’re willing to lose is an important factor when it comes to investing in cryptocurrency. Setting a limit will help you avoid making bad decisions based on emotion and keep your head clear while the market is volatile. If a coin drops, don’t buy more just because you feel like the value will rise again because that’s not always the case.
You don’t want to go over your budget by buying more tokens than you can afford, either. Otherwise, your losses could be even worse than they would have been if you’d stuck with what was originally agreed upon for trading purposes.
Don’t Jump on Volatile Trends
If a coin is rising quickly, the price will likely drop back down. It’s not uncommon for coins to double or triple in value overnight but then return to their original price within a day or two.
If you’re considering investing in a cryptocurrency that has grown rapidly, take some time and research its history before investing. Look up how much the coin cost when it first started trading on an exchange and look at how much it was worth at the beginning of this year compared with now. If there’s been an 80% increase since January 2020 but only a 10% increase since June 2019 (and no big news), that may indicate that investors are getting nervous about continued success (or lack thereof).
The best thing to do when researching new investment opportunities is to ask yourself:
- Why would someone else want to buy into your idea?
- What problem are they trying to solve?
- Is there anything unique about what you’ve got going on?
Research Cryptocurrency Taxes Carefully
Research cryptocurrency taxes carefully and make sure you’re paying them correctly. Keep track of your transactions to make sure you’re paying the correct amount of tax. Don’t try to avoid paying taxes on cryptocurrency investments because it’s illegal and a bad idea
Diversify Your Cryptocurrency Portfolio Often
When a new coin becomes popular, try buying a small amount if it seems like the type of investment you want to try out. You can also diversify your portfolio by adding other coins that you think might have a chance at hitting the big time. But don’t go overboard! If you’re investing in Bitcoin, don’t forget about other altcoins.
- Litecoin: The most popular alternative coin (altcoin) to Bitcoin is Litecoin, which has its advantages over Bitcoin and may become more profitable than Bitcoin in 2022.
- Ripple: Another popular altcoin is Ripple, which has skyrocketed in popularity since its inception in 2012 due to its ease of use as both an investment tool and a currency for everyday transactions
- Cryptocurrency Exchanges: These are online platforms where you can buy and sell cryptocurrencies like Bitcoin, Ethereum, and Ripple. The most famous exchanges are Binance, Coinbase Pro, Kraken, and Gemini. The main issue with these exchanges is that they require KYC (Know Your Customer) verification which means that you need to submit personal information such as your identity card or passport before you can use the service. If a hacker gets hold of this data, it could create huge problems.
- OTC Brokers: An over-the-counter broker is an individual who earns commissions by trading large amounts of cryptocurrency for investors on an ad hoc basis rather than through auctions held by an exchange. They have higher fees than conventional exchanges, but there’s no need for KYC verification, so it may be worth considering if privacy is important to you.
- Fiat-To-Crypto Exchanges: This kind of exchange allows users to buy cryptocurrencies using fiat currencies such as USD or GBP – but again requires KYC verification which makes it less private than other options discussed here! Some popular examples include Coinbase Prime (previously known as GDAX).
- Crypto-To-Crypto Exchanges: These allow users who already own cryptocurrencies like Bitcoin or Ethereum but want different ones instead (like Litecoin). However, these also require some form of identification before being able to trade – so again, not very private at all!
Trading in cryptocurrency can be safe, provided you take all the measures. Conducting your research about the market cap, cryptocurrency list, and prices before setting your foot in it can help you walk a long way.